The dividend distribution tax (DDT) on liquid mutual funds is applied at the rate of 28.33% (including surcharge and cess)
07-Apr-2017 •Research Desk
Wealth 25 Plan come under Debt oriented mutual fund for DDT?
Yes, Birla SL MIP II Wealth 25 Plan is a debt oriented mutual fund. Earlier the dividend distribution tax (income distribution tax) were different for individual/HUF and domestic companies and it was also different for debt and liquid funds. The difference in dividend distribution tax levied of debt oriented mutual funds and liquid mutual fund is no longer applicable. Now there is a uniform tax on dividend for all debt mutual funds at the rate of 28.33% (including surcharge and cess) of the dividend amount. It is paid by the fund house at the time of declaring the dividend. The investors do not have to pay any further tax upon receiving the dividend. The fund houses pay Dividend Distribution Tax (DDT). So the dividend that is paid out to the investor is after deducting the DDT. Hence there is no further tax to be paid by the investor.